Cleveland-Cliffs Q3 Earnings: Revenue, EPS Miss On 'Weaker Demand And Pricing,' Shares Slide

Cleveland-Cliffs Inc CLF reported financial results for the third quarter after the bell on Monday. Here’s a rundown of the report.

• Q3 Revenue: $4.57 billion, versus estimates of $4.77 billion

• Q3 EPS: Loss of 33 cents, versus estimates for a loss of 27 cents

Steel shipments totaled 3.8 million net tons in the third quarter, consisting of 36% hot-rolled, 28% coated, 17% cold-rolled, 4% plate, 4% stainless and electrical and 11% other, including slabs and rail.

Cleveland-Cliffs said it ended the quarter with $3.8 billion in total liquidity.

“In Q3, weaker demand and pricing drove tighter margins, and ultimately led us to temporarily idle our Cleveland #6 blast furnace,” said Lourenco Goncalves, chairman, president and CEO of Cleveland-Cliffs.

“We achieved our lowest unit cost since 2021, exceeding our already aggressive cost reduction targets, but that was not enough to offset the negative impact of two of our top four automotive clients who continue to underperform their own expectations. Due to our high exposure to the automotive sector, Cliffs was more affected than our competitors.”

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Cleveland-Cliffs highlighted its recent acquisition of Stelco. The company said Stelco’s assets are well-capitalized and it expects to benefit from the company’s cost advantages and strong business model on day one. Cleveland-Cliffs noted Stelco’s business has “virtually no exposure” to the automotive sector. 

Outlook: Cleveland-Cliffs lowered its capital expenditures outlook for full year 2024 from a range of $650 million to $700 million to a new range of $600 million to $650 million.

“We expect steel demand to rebound in early 2025, supported by a number of economic and political factors. With Stelco’s assets and our cost reductions, we’re well-positioned to capitalize on this upswing and will be able to reduce acquisition debt quickly with healthy free cash flow,” Goncalves added.

Management will hold a conference call to further discuss the company’s third-quarter results Tuesday morning at 8:30 a.m. ET.

CLF Price Action: Cleveland-Cliffs shares were down 4.04% after hours at $12.58 at the time of publication, according to Benzinga Pro.

Photo: Janno Nivergall from Pixabay.